Cordy Oilfield Services Inc. Reports Fourth Quarter and 2013 Annual Results
March 27 2014 - 4:16PM
Marketwired Canada
CORDY OILFIELD SERVICES INC. (the "Corporation" or "Cordy") (TSX VENTURE:CKK)
released today its fourth quarter and 2013 annual results.
Year ended December 31, 2013
Cordy generated consolidated revenue of $118.0 million in 2013. On a year over
year comparative basis, consolidated revenue increased by $2.6 million.
Consolidated revenue in the first, second, and fourth quarters of 2013 increased
year over year by $1.8 million, $1.5 million and $1.3 million respectively,
which was partially offset by a year over year decrease in consolidated revenue
in the third quarter of $2.0 million.
-- The Heavy Construction segment had increased revenue of $4.3 million or
8 percent for the year ended December 31, 2013. This was primarily
attributable to growth in the oil sands region.
-- The Environmental Services segment experienced the largest revenue
increase of $5.5 million or 20 percent for the year ended December 31,
2013. The revenue increase is primarily attributable to increased
activity in the oil sands region and the 2013 Alberta flood clean-up.
-- The Manufacturing and Supply segment had decreased revenue of $1.3
million or 9 percent for the year ended December 31, 2013, which was
primarily attributable to a decline in drilling activity and loss of
customers earlier in the year which was then partially offset by demand
for PDC drill bits used in horizontal drilling in the latter part of the
year.
-- The Pipeline and Facilities segment had decreased revenue of $5.9
million or 27 percent for the year ended December 31, 2013. During the
year the focus was to eliminate lower margin projects and reduce
operations from two locations to one, which resulted in a decrease in
revenue.
Earnings before interest, taxes, depreciation, amortization and impairment and
share-based payments ("EBITDAS") was $4.6 million for the year ended December
31, 2013 compared to $4.7 million for the year ended December 31, 2012, a
decrease of $0.1 million.
-- The Heavy Construction segment had a positive impact on EBITDAS with the
sector experiencing growth year over year increasing by $4.4 million to
$6.6 million, primarily as a result of continued strength in
construction in the oil sands region.
-- The Environmental Services segment EBITDAS remained constant at $4.4
million in 2013 and 2012.
-- The Manufacturing and Supply segment had an EBITDAS loss of $0.7 million
compared to a loss of $1.2 million in 2012.
-- The Pipeline and Facilities segment EBITDAS decreased by $3.9 million to
a loss of $1.2 million in 2013 compared to positive EBITDAS of $2.7
million in 2012.
For the twelve months ended December 31, 2013, Cordy had a net loss from
continuing operations of $1.5 million, an improvement of $1.6 million from the
net loss of $3.1 million in 2012.
Fourth quarter ended December 31, 2013
The Corporation's revenues from operations for the three months ended December
31, 2013 increased $1.3 million to $27.9 million, up from $26.6 million in the
same period in 2012. The Corporation experienced revenue growth in the Heavy
Construction, Manufacturing and Supply and Pipeline and Facilities segments.
These increases in revenue were partially offset by a decrease in revenue in the
Environmental Services segment which resulted from customer delays.
EBITDAS from continuing operations for the three months ended December 31, 2013
was a loss of $2.5 million compared to a loss of $3.2 million for the three
months ended December 31, 2013, an improvement of $0.7 million.
The net loss from continuing operations was $2.7 million or a loss of $0.02 per
share for the three months ended December 31, 2013 compared to a loss of $4.6
million or a loss of $0.04 per share for the three months ended December 31,
2012.
As at December 31
($ millions except share
price and per share Change Change
amounts) 2013 2012 ($) Q4 2013 Q4 2012 ($)
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FINANCIAL RESULTS
Revenue 118.0 115.4 2.6 27.9 26.6 1.3
EBITDAS(1) 4.6 4.7 (0.1) (2.5) (3.2) 0.7
Net earnings (loss) and
total comprehensive
income (loss) from all
operations (1.5) (3.1) 1.6 (2.7) (4.6) 1.9
Cash flows generated
from (used in)
operating activities
from all operations 7.5 7.5 - 5.5 1.8 3.7
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SHARE INFORMATION
Earnings per share from
continuing operations
($) (0.02) (0.04) 0.02 (0.03) (0.04) 0.01
Earnings per share from
all operations ($) (0.02) (0.04) 0.02 (0.03) (0.04) 0.01
----------------------------------------------------------------------------
(1) Earnings before interest, taxes, depreciation, amortization, impairment
and share-based payments (see reader advisory)
Revenue
Heavy Construction 55.4 51.1 4.3 15.9 12.5 3.4
Environmental Services 33.9 28.4 5.5 5.5 8.4 (2.9)
Manufacturing and
Supply 13.0 14.3 (1.3) 3.7 3.6 0.1
Pipeline and
Facilities 15.7 21.6 (5.9) 2.8 2.1 0.7
--------------------------------------------------
Total 118.0 115.4 2.6 27.9 26.6 1.3
EBITDAS(1)
Heavy Construction 6.6 2.2 4.4 0.9 (0.3) 1.2
Environmental Services 4.4 4.4 - (1.0) 0.9 (1.9)
Manufacturing and
Supply (0.7) (1.2) 0.5 (0.3) (2.1) 1.8
Pipeline and
Facilities (1.2) 2.7 (3.9) (1.0) (0.5) (0.5)
Corporate (4.5) (3.4) (1.1) (1.1) (1.2) 0.1
--------------------------------------------------
Total 4.6 4.7 (0.1) (2.5) (3.2) 0.7
----------------------------------------------------------------------------
(1) Earnings before interest, taxes, depreciation, amortization, impairment
and share-based payments (see reader advisory).
OUTLOOK
Cordy has diverse business units which have had stronger first and third
quarters. In fiscal 2013, Cordy experienced revenue growth in both its Heavy
Construction and Environmental Service segments; however, our fourth-quarter
results were below expectations, as there was an unanticipated slowdown due to
customer delays as to when their projects were to commence. Our segments did not
generate their expected fourth-quarter ramp-up in activity that is historically
experienced due to customer delays in the fourth quarter of 2013 as well as the
first quarter of 2014.
The Corporation is dependent, to a degree, on the overall health of western
Canada's oil, natural gas, and mining sectors. Generally, these sectors have
projected reduced capital expenditure budgets for 2014 and have delayed
projects. These factors mean that our industry remains highly competitive with
few opportunities to realize pricing gains in 2014.
Cordy continues to re-evaluate the allocation of our investment of people and
equipment. During 2014, the Corporation will re-allocate its resources to focus
on Heavy Construction, Environmental Services and Manufacturing as its primary
business segments. Effective January 1, 2014, Cordy amalgamated its Pipeline
segment into its Heavy Construction segment. As a result, Cordy now operates in
three segments in 2014:
-- Heavy Construction;
-- Environmental Services; and
-- Manufacturing
The prospects for the oil sands region are anticipated to be the primary driver
of potential growth for our Heavy Construction and Environmental Services
segments. In 2014, we anticipate this will be slower in the first half of the
year until customers fully ramp-up their projects. Heavy Construction customers
in the natural gas sector are also anticipated to be slower in 2014 while mining
sector and Environmental Service clients are anticipated to increase activity in
the second half of 2014. Any significant growth will be dependent upon winning
new customers or new projects from existing customers in 2014. In our
Manufacturing segment, drilling activity in western Canada is the primary driver
of our business. In 2014, we anticipate expanding sales of our PDC drill bits in
both North America and select international locations.
Management continues to seek opportunities to expand or realign Cordy's
operations in sectors where its business segments operate and to refinance the
business to support the Corporation in the long term.
Complete copies of Cordy's audited consolidated financial statements for the
year ended December 31, 2013 and the associated Management's Discussion and
Analysis are available on our website www.cordy.ca or on SEDAR at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
READER ADVISORY
Effective January 1, 2011, Cordy began reporting its financial results in
accordance with International Financial Reporting Standards (IFRS). Prior-year's
comparative amounts were changed to reflect results as if Cordy had always
prepared its financial results using IFRS.
This News Release contains certain statements that constitute forward-looking
statements. These statements relate to future events or the Corporation's future
performance. All statements, other than statements of historical fact, that
address activities, events or developments that the Corporation or a third party
expects or anticipates will or may occur in the future, are forward-looking
statements. These include the Corporation's future growth, results of
operations, performance and business prospects and opportunities; prevailing
economic conditions; commodity prices; sourcing, pricing and availability of raw
materials, components and parts, equipment, suppliers, facilities and skilled
personnel; dependence on major customers; uncertainties in weather and
temperature affecting the duration of the service periods and the activities
that can be completed; regional competition; and other factors, many of which
are beyond the Corporation's control. These other factors include future prices
of oil and natural gas and oil and natural gas industry activity, including the
effect of changes in commodity prices on oil and natural gas exploration and
development activity, the ability to complete strategic acquisitions and realize
the anticipated benefits of any acquisitions that are completed, the
Corporation's outlook regarding the competitive environment it operates in, and
the assumptions underlying any of the foregoing. Forward-looking statements are
often, but not always, identified by the use of words such as "seek",
"anticipate", "plan", "continue", "estimate", "expect", "may", "will",
"project", "predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar expressions. These statements involve known and
unknown risks, uncertainties and other factors, many of which are beyond the
Corporation's control, including those discussed under "Risks and Uncertainties"
and elsewhere in this News Release, that may cause actual results or events to
differ materially from those anticipated in such forward-looking statements. The
Corporation believes that the expectations reflected in those forward-looking
statements are reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements included in this
News Release should not be unduly relied upon. These statements speak only as of
the date of this News Release. The Corporation does not intend, and does not
assume any obligation, to update these forward-looking statements, whether as a
result of new information, future events or otherwise, except as required under
applicable securities laws. The forward-looking statements contained in this
News Release are expressly qualified by this cautionary statement.
Cordy uses the measures Earnings Before Interest, Taxes, Depreciation,
Amortization and Impairment and Share Based Compensation (EBITDAS) in this news
release. This measure does not have any standardized meaning prescribed by
International Financial Reporting Standards (IFRS). It is, therefore, considered
to be non-IFRS term and may not be comparable to similar measures presented by
other entities. Management of Cordy uses these non-IFRS measures to improve its
ability to compare financial results among reporting periods and to enhance its
understanding of operating performance, liquidity and ability to generate funds
to finance operations. This non-IFRS measure is also provided to readers as
additional information on Cordy's operating performance, liquidity and ability
to generate funds to finance operations. EBITDAS is an approximate measure of
the Cordy's pre-tax operating cash flow and is generally used to better measure
performance and evaluate trends of individual assets. EBITDAS comprises earnings
before deducting interest and other financial charges, income taxes,
depreciation and amortization, net income attributable to non-controlling
interests and preferred share dividends.
FOR FURTHER INFORMATION PLEASE CONTACT:
For general information:
Cordy Oilfield Services Inc.
David Mullen, Chairman & Chief Executive Officer
403-266-2067
403-237-6278 (FAX)
david.mullen@cordy.ca
For investor relations information:
Cordy Oilfield Services Inc.
David Boomer, CA, CPA , Chief Financial Officer
403-266-2067
403-237-6278 (FAX)
dave.boomer@cordy.ca
www.cordy.ca
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